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Year Principal Interest
1985 $18,000 $13,545
1986 36,000 11,610
1987 72,000 10,976
Petitioner owned a 50-percent interest in Silver Lake at the time
of its sale in 1980, and his basis was $70,000.
OPINION
Respondent argues that petitioner realized installment gains
of $6,144, $12,288, and $24,577 in 1985, 1986, and 1987,
respectively, for the principal amounts paid to Mr. Miles.25
Petitioner, on brief, does not address the matter. We find that
petitioner realized installment gains of $6,144, $12,288, and
$24,577 in 1985, 1986, and 1987, respectively. Sec. 453(a).
Respondent originally determined that petitioner realized
interest income for the full amount of the interest payments made
to Mr. Miles. Respondent now concedes that petitioner realized
only 50 percent of the original amounts determined. Petitioner
does not address on brief his liability for half of the interest
income. We hold that petitioner realized interest income of
$6,773, $5,805, and $5,488 in 1985, 1986, and 1987, respectively.
25Respondent computed petitioner’s gross profit percentage
as follows: Gross profit ($150,600) = sales price ($220,600)
minus basis ($70,000); gross profit percentage (0.682684) = gross
profit ($150,600)/contract price ($220,600). Respondent then
applied the gross profit percentage to each of the principal
payments in 1985, 1986, and 1987, respectively, and divided the
result in half to account for petitioner’s 50-percent interest.
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